Over the last decade or so, there’s been a gradual spike in consumer expectations for real time supply chain visibility. Spread across all industries, this dimension of service is now directly related to the quality of reputation of any organization – big or small.
In order to ensure a reduction of waste and ultimately costs, the food and beverage industry is transitioning into becoming quite heavily reliant on track and trace technology as a form of advanced supply chain visibility. By creating and employing this solution for the fresh produce industry, our technology tracks and traces food items from farm to table. Being able to access and obtain critical information at every step of the supply chain journey can save food items from being discarded because of unmonitored problems that occur along the way, as well as circumvent error in multiple layers of the journey.
The COVID-19 pandemic has brought to light the fact that many years of working toward optimizing food supply chains for cost have definitely left them lean, but also extremely fragile. Food processors and producers who make up this line of lean manufacturing have customized production lines, outgoing inspections and capital equipment to meet the requirements of buyers, leaving only a handful of companies in the position of production and distribution control of many major food categories. And while these strategies do help in enabling cost cutting in the short term, what they actually do is end up putting suppliers in a position where they’re not able to adequately adapt to shifts in demand, or sustain broken links in the supply chain.
A notable example of this is when farmers had to resort to burying their surplus crops as well as pour out gallons of milk as recently as April of this year – all while empty shelves at grocery stores stood tall. This is also the reason why there was a nationwide shortage of meat upon the closure of the 4 major meatpacking plants, which are responsible for a whopping 85% of the country’s meat production. America’s food supply chains are unfortunately too delicate to sustain the blows of a crisis or for that matter any major level disruption in chain flows.
In order to “maintain the health of the food supply chain” the government announced aid in the form of $19 billion to facilitate compensation for farmers due to losses brought upon by the pandemic. Although this stands as a significant amount, it is not the solution to the actual problem at hand.
To secure supply, we need to restructure our supply chains by enabling producers with the convenience of switching between paths as required to avoid shortages, and make use of surpluses, through creating multiple paths to the market for every single food item. The structure of supply chains is already organically gravitating towards becoming more circular with surplus or unused food items being fed back into the system for recycling or reprocessing. This kind of change means a shift from set ways of the principles of lean manufacturing and embracing a more flexible and in effect more resilient approach through digitizing systems with real time visibility into supply chains.
Suppliers, service providers, original equipment manufacturers and IT systems all make up the vast supply chain ecosystem, and visibility into a supply chain means visibility into each of these intricate webs of processes. Collecting data and making it accessible and available through creating a literal digital twin of the physical food item journey allows for a complete track and trace of processes. Through this kind of greater visibility into every step of the journey, we enable more flexibility and security. If a supplier for example is unable to deliver, or there is a sudden shift of demand – companies are still able to make a seamless reroute to another chain, with no disruption to cash flow or production.
According to the USDA, a significant 30-40% of all produced food in the country is completely wasted across all networks in supply chains. Greater visibility into supply chains also allows companies the opportunities to identify unused and surplus produce, giving them a chance to reprocess or recycle them back into the supply chain. Waste can also be composted and used to fertilize crops, or even recycled into animal feed.
It is not the shortage of food that proves to be the problem in the United States, but rather a systemized distribution of it instead, as was highlighted as a by-product of the pandemic. By creating a system that is built on the value of transparency and flexibility, our supply chains stand the chance of not only sustaining the next crisis more efficiently but also adopting a more ethical and environmental approach.